HR Transformation Continues to Mature

February 25, 2010 – ADP, a provider of HR, payroll and benefits administration services, has released a joint research report commissioned by ADP and the Human Resources Outsourcing Association (HROA) demonstrating that HR transformation movement is maturing and proving its merit over time, reaching deeper into mid-market and smaller companies. The report indicates that over 80 percent of respondents are currently working on HR transformation, and another 95 percent of mid-market companies are engaged in HR transformation. Although the research has shown persistent stumbling blocks to successful HR transformation — including the skills of existing HR staff, internal bureaucracy, lack of adequate technology, and underestimation of resources required — the report indicates a reversal of a trend in recent years as those hurdles appear to be declining. “HR transformation has become a central component of HR organizations, large and small. As this report reveals, there are a wide variety of benefits that accrue to organizations that undertake these efforts, and there is much to learn from those that have been engaged in HR transformation over recent years,” said Richard Crespin, global executive director of HROA. The study also found that a hybrid approach of internal reengineering, shared services and outsourcing remains the most common HR transformation strategy. Although it remains the least likely sole strategy, outsourcing as a predominant strategy has experienced a near double increase between 2008 and 2009, from seven to 12 percent, and is a more common strategy amongst mid-sized than in larger or smaller organizations. Although American organizations are still more likely than others to outsource, they indicated a significant decline in outsourcing activity in 2009, whilst Asia Pacific organizations indicated a significant increase. Respondents most often budget less than $1million annually for HR outsourcing. The highest percentage of respondents say they anticipate increasing their HR outsourcing budget; however, that percentage has dropped from 55 percent in 2008.